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Leavey Research Seminar Series: Robert Eberhart : Management Department : Leavey School of Business
noon to 1:15 PM
Robert Eberhart of the Management Department will be presenting his cutting-edge research on Japanese entrepreneurship as part of the Leavey Research Seminar Series.
Title: Compensating Conformity: Why New Ventures Resist Attempts to Ease Entry
Abstract: This study finds that changes to the institutional environment to ease the burdens of starting a new venture deprive ventures of the opportunity to signal organizational achievement and capability and thus fail to catalyze entrepreneurship in new industries. This is because the institutional changes that ease entrepreneurial founding by making it easier and less costly to start a firm may be ineffective because creating a low entry-cost environment is likely to conflict with the importance of appearing legitimate in the eyes of potential resource providers, customers, and other stakeholders. Using insights from research on the effects of institutional change on entrepreneurship, this study shows that when the cost of entry are lowered by legislation, firms starting in more novel and innovative industries, or with more novel types of founders, are less likely to adopt the lowered cost organization form. This is because they need to signal more conformity than less novel firms to resource providers and stakeholders to compensate. These results also find that novel firms that signal conformity to social norms with more socially elite founders will – in contrast - adopt the lower cost organization form, what we call compensating conformity. Thus, entrepreneurs who adopt organizational forms that conform with previously socially accepted forms attenuate institutional changes that are thought to catalyze innovative entrepreneurship by making it easier to start firms in newer industries.
Business School Dean's Office
Ellen PetersonTel 408-554-5118